Other things the same,in the Solow model in the steady state,a higher rate of population growth ________ the level of output per worker.
A)leads to an increase in
B)has no long-run effect on
C)has an ambiguous effect on
D)leads to a decrease in

Question

Quizplus · Accepted Answer

In the Solow model, a higher rate of population growth leads to an increase in the amount of labor available. However, since capital is fixed in the short run, the additional labor leads to diminishing returns to capital and a lower capital-labor ratio. This means that each worker has access to less capital, lowering their productivity and ultimately causing output per worker to decrease in the long run.

Other Things the Same,in the Solow Model in the Steady